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tv   Capital News Today  CSPAN  June 17, 2010 11:00pm-2:00am EDT

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are you? >> i'm very concerned that we get to the bottom of this incident and understand exactly what happened such that want we can assure that it never happens again. >> easy to say. >> mr. chairman, just a request, please. if mr. hayward could move the microphone a bit closer i'm having difficulty hearing. >> right. i think we all are. just pull at little closer if you could, please. %%. sullivan for questions. i should mr. upton is here from michigan member of the full of kmeeft and -- >> mr. hayward, according to the occupational safe taken health administration there is mounting evidence that bp is one of the worst safety records of any major oil company operating in the united states. is there a culture that led to
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disasters like the refinery explosion in texas city, texas and the alaska oil pipeline spill? >> i think we've acknowledged in 2005 and 2006 that we had serious issues and as a consequence set out to implement systematic change in the culture and safety of bp. i set the tone from the top by saying very clearly safe, reliable operations were our number one priority. we invested billions of dollars in the integrity of that plan. we've recruited many thousands of engineers and technologists into our company including many from other industries such as the nuclear industry and other parts of the chemical and oil and gas industry and we have changed fundamentally a whole approach to the management of our operations through the implementation of significant changes to our processes. >> doesn't seem like that.
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if you look at the reports on what happened on the deep horizon doesn't look like many safety procedures have changed much at all. mr. hayward, do you feel that your safety record compared to other major oil companies is comparable? >> as i said, it's clear that we had some serious issues to deal with in the 2005-2006 time frame. and we have worked hard to improve that safety performance since that time period. that doesn't seem to be changing, mr. hayward, your safety performance doesn't. here's some highlights of your safety procedures. bp had 760 safety violations and you paid millions of dollars, $373 million in fines to audiotape void criminal prosecution. also if you look at other industries, sir, let's take some of your competitors, for
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example. sunn sunoco had eight. conocophillips had eight at the same time you had 760. citgo had two safety violations the same time you had 760. and exxonmobil had one safety violation the same time period you had 760. how in the heck do you explain that? >> as i said, we acknowledged the problems we had in 2005 and 2006. the vast number of those things that you've referred to date from that time period. and we have made major changes in the company over the last three to four years. >> you think the changes you made in that time period you're talk about while air pressure ceo -- do you think that they were using those measures and protocols on the deep horizon? >> to my best knowledge they absolutely were. >> up don't think they shortcuted anything on the deep horizon? as ceo of a major company --
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looking back, sir, do you think that they cut corners? >> i believe we should have wait the result of the investigations before we draw conclusions. sir, you had to have looked at some of your investigations. internally your investigation did it show any kind of break down? >> it shows -- >> that you with your protocols you said you couldn't place, were any of those shortcuted? >> the investigation is still ongoing. it's identified seven areas. the cement, the casing, the integrity pressure, well control procedure, and three failures of the blow-out preventer. and when the investigation is concluded we'll make the judgment. >> well, i'd say that this problem is with your organization and your safety and the culture of your company, safety culture and not a culture of our domestic oil and gas
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producers as we can see they haven't had the kind of problems you've had with cutting corners on safety. they have a lot of redundancies, contingency plans. this may not have happened if one of these other companies was operating that rig. would you say that would be true. >> don't think i can make that judgment. >> do you think the other companies have different or stricter or stricter guidelines with their safety and spend more money on it? you probably compare yourself to other companies, i'm sure. >> i can't make a detailed comparison, but i can be clear what we've done, we've invested billions of dollars, recruited thousands ever people and evening changed significant leadership our processes, systems and procedures in the course of the past three years. >> thank you. i yield back. >> thank you. before mr. dingell begins questions we have votes on the floor again. there's less than ten minutes remaining. so i'm going to get through mr. dingell's questions and then
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we'll recess. >> thank you, mr. chairman. >> mr. hayward, you had two choices. using single casing or tie back. the risks are substantial associated with single casing which is what bp chose. please answer yes or no. can you assure us that under oath that that was not a decision made to save time and money? >> i wasn't part of that decision making process. . i'm sorry? >> i was not part of that decision making process. so, i can't possibly know the basis on which that decision was taken. >> how much money was saved by using the single string casing? >> i believe the documents refer to a sum of, i think, i think, $7 to $10 million. they refer to the fact that the casing would as a screen.
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>> please submit that for the record. how much time was saved? >> i don't recall how much time was saved. there would have been some time saved. >> would you submit that for the record, please? you had the option of using a number of single edgers to keep the casing in center of the bore holy. haliburton recommended 21. you ultimately chose to use two. can you tell us under oath that the decision to use six centralizers instead of the recommended 21 was not made to save time and money? >> i was not involved in that decision, so it's impossible for me to answer that question. >> all right. can you tell us how much money bp saved by not using the proper number of centralizers? >> i'm afraid i can't recall that. >> would you submit that for the record. how much time was saved? >> i don't recall that, either, i'm afraid. >> please submit that for the
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record. you at bp decided not to conduct a cement bond log in a test to find out if the bonding was cemented despite regulations. can you state under oath to the committee that bp did not decide against using this cement bond log to save time and money, yes or no? >> my understanding, from what i've read -- again, i was not involved in the decision making -- is that the team on the rig, the transocean team, the bp team and the haliburton team concluded they had sufficient evidence that the cement bond was good and decided not to use the cement bond log. >> does that mean yes or no? >> it means i cannot answer your question in that form. >> how much would this test cost bp? >> i can't recall that number,
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i'm afraid. >> please submit for the record. how long would the test have taken? >> on the order of hours, i believe, but i'm not certain. >> please submit that for the record. would bp -- well -- now, you were supposed to circulate drilling mud in the well bottom when the case is on the bottom and before submitting. this is referred to as bottoms up. did bp fully circulate the mud, yes or no? >> i don't believe the mud was fully circulated. the process the team on the rig were following was on line and approved by mms. >> thank you. did bp -- can you assure us under oath, again, that the decision not to fully circulate the mud was not made to save money and time? >> i can't answer that question because i wasn't there. >> thank you. how much money did avoiding this procedure save? >> i'm afraid i can't recall. >> would you submit for the
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record, please. >> how long would the fully circulating of the mud have taken? >> i'm afraid i can't recall that, either. sdp . >> would you submit that for the record, please. now, bp made the decision not to install a casing hangar lockdown sleeve. can you secure the committee under oath that the decision not to install such lockdown sleeve was not made to save time and money? >> that was not a decision i was privy to. >> how much savings did the lockdown save bp? >> i don't know. >> how much time did the lockdown sleeve save? >> i'm afraid i don't know that, either. >> oyou've received a letter frm the chairman of the subcommittee and the full committee asking some questions. when will the committee have the response to that letter?
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>> you'll get them as soon as we can make them available to you. >> now, did bp have an emergency response plan in the event of a failure? >> an emergency response plan or a spill response plan, congressman? >> sorry? >> sorry. what was the question, please? >> did you have a response plan in event of a failure at the well? >> we had a response plan which was -- >> what was the date of that response plan? >> the response plan was last approved, as i recall, in june of 2009. >> please submit to us the date of the response plan and the number of times in which it was updated and who it was that did the formulation of the plan. please inform us for the record whether or not that plan was approved by the mineral management service and on what date. thank you. mr. chairman? i look forward to seeing those answers in the record.
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>> thank you, mr. dingle. letting members know we're going to stand in recess for one hour. the good news is when we come back, these are last thoughts of the day. we'll be able to finish the hearing then. mr. burgess? >> mr. harris has brought up a point that he followed the procedures of mms. once again, it is critical that we get the federal regulatory agencies to ask them questions. no information after all these hearings is really disturbing to me. >> mr. burgess, as you know, we have a methodical method we've used in this investigation. you know we have at least two more laerhearings. one was scheduled for tuesday, but at your request and my request, we've moved it back a little more. we'll have all parties here before this committee at the appropriate time. >> clearly, mr. hayward is not prepared to answer the questions, and we need to get mms in here as well. >> mms is not going to help mr.
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hayward answer the questions. he needs to answer the questions himself. >> any one of us could do his job. >> we're in recess for one hour.
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>> several members of the committee are disappointed with your lack of candor and your refusal to answer questions. we wished to have this meeting last week. we agreed to give you an additional week so you would be adequately prepared for this hearing. in addition, we allowed you to prepare. chairman waxman and i sent you a 14 page letter outlining five issues to should be prepared to address in today's hearing. you did not address any in your opening statement, and thus far have responded with little substance and claims of not knowing or not being part of the
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decision making process. you say you are accepting responsibility for your actions, yet you have not provided us with direct answers thus far today. i sincerely hope that you will reconsider your approach to these questions. i hope you will be more forthcoming and less evasive with your answers for the remainder of this hearing. we are done with those. -- we are done with votes. we should be able to get through a second round of questions. you're a ceo with great experience. you have a phd. you have been head of exploration. you know what is going on. we hope you would have more candor in responding to questions. with that, i will turn into ms. bbackburn for questions. >> indeed, mr. hayward, we are frustrated with hearing you say you were not a party to certain
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decisions or were not in the chain of command or cannot comment because of ongoing investigations. i am going to try a different tactic because i do want to get some answers and get some items answered. i want to go back to the safety issues. i grew up on the gulf coast. i am familiar with people working offshore. i would like to know from you -- have you been briefed on the safety issues and the safety concerns? if you were a part of the decisionmaking process on what would be considered the best operating practices, where you a part of the chain of command? what is the chain of command for dispute resolution when there is a difference about how to approach safety and?
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go ahead. i would love your response. >> i am the ultimate in the chain of command, but i was not involved in the decisionmaking on the day. >> let us do this again. if you were not involved in the decisionmaking of how safety is approached, would you submit to us in writing for the record a description of what that chain of command is and what the process is when there is a difference of opinion on how you approach break safety? would you be willing to submit that? i will ask you and your team to submit that to us for the record. in addition, since becoming ceo have you been briefed on the significant safety incidents that have occurred in the explorations at your alaska production facilities over the past year? >> i have discussed those at the group operating risk committee. >> as a result, did you
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authorize changes to bp policies and practices for dealing with the safety? >> we took actions in alaska to change both the organization and some of the processes. >> thank you. since the deepwater horizon incident, have you made changes, and what are those? would you submit those to us for the record? >> we have made changes to our testing procedures. we have made changes to the intensity with which well site leaders are aware of control procedures and a variety of other interventions that are predicated on what we have learned from the incidents so far. as we learn more we will make more changes as we deem appropriate. i would be very happy to submit to you, congresswoman, the details of the changes we have made. >> thank you. have you -- did you ask other
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companies for help in cleaning up the bp oil spill? last week for the hearing, we had several different companies. did you approach other companies or other countries and ask for their help and their expertise in plugging that leaked and participating in the cleanup? >> we sought help from both immediate peers and competitors in the gulf of mexico and globally from around the world and across america. there are several hundreds involved in the efforts. all the major operators in this country, major operators from elsewhere in the world, and many of the major academic institutions in this country, some of the greatest minds in the coontry, are involved in trying to do with this problem. >> didn't participate at your invitation or the governments -- did they participate at your invitation or the government's
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invitation? >> that articipated at our -- they participated at our invitation. the government brought some of the great academic institutions in this country to bear. >> are you currently -- is bp currently working on industrywide efforts to look at rig safety? >> we have made recommendations to the mms with respect to the things we have worked -- we have learned so far, especially with respect to blowout preventers. we will continue, as we learn what the realities of this accident are, to make our recommendations to the relevant authorities. i believe that in the course of the coming months the industry will work together to determine what is the best way forward. >> we hope that you are working together. i hope you understand our frustration, when you have stated before safety would be a
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priority for bp. we expect you all to take action on lessons learned. when you tell us that you are taking that action and then you return, because of what has occurred -- mr. hayward, i cannot begin to tell you how disappointing is to us that you are saying -- and you mentioned actions and words in your testimony. but certification you are giving the rhetoric. -- but sir you are giving the rhetoric. we want to see actions that you have learned this lesson and that you are going to share these best practices with the industry. that would be very helpful. thank you for being before us today. i yield back. >> thank you. mr. hayward, you indicated you made recommendations on the blowout preventer your company has. would you provide us to this committee? >> we certainly can.
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>> mr. hayward, the existence of large crowds or plumes of oil suspended deep beneath the ocean surface are of concern because the toxic oil and dispersants can poison the aquatic plants and animals and they also consume oxygen, potentially asphyxiating real-life. on may 30, you stated that your samples showed no evidence of such things. on june 7, in response to my letter, bp again denied the plumes existed, saying there is no coherent body of hydrocarbons below the surface. even after noaa administrators claimed that existed, you continued to deny on television their existence. these are photographs presented to us on the committee by dr. joy of the university of georgia, who has sampled the
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deepwater of the gulf and found such plumes. on the right is a filter with oil clearly present from water from within a plume as it passed by. it is not just university scientist data. i have up on the screen as well from epa's website a substantive plume detected using bp's data. there are 17 red dots indicating that your own data shows evidence of subsurface plumes. this is your data, mr. hayward. are you know, once and for all, prepared to say there are plumes or clouds of oil suspended deep beneath the surface of the ocean? yes or no, mr. hayward? >> as i understand the data, it indicates that there is oil in very low concentrations at 0.5 points per million distributed
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through the water. the detailed analysis noaa has conducted in three locations around the spill show that in one location there is 0.5 parts per million clearly attributed to the spill. >> are there plumes of oil beneath the ocean's surface? >> there are concentrations of oil of about 0.5 parts per million in the water column. some of it is related to this bill. other samples have been typed to other oil. >> you do not define that as a plum? >> -- you do not define that as a plume? >> i am not an oceanographic scientist. >> i will take that as a continuing no from you. your testimony contents to be -- continues to be at odds against all involved scientists. yesterday, at the commerce subcommittee on health, the director of the national institute of occupational health
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and safety told me in answer to my question that he has asked bp for a roster of all workers multiple times and bp has failed to give him that information -- information that is critical to tracking chemical exposure. we were outraged at bp's the year to take such a straightforward step to protect the health of their workers. mr. hayward, will you commit to immediately provide the national institute of occupational health and safety and the centers for disease control with all of the information they need to evaluate health impacts to protect these workers? >> we provide all information requests as quickly as possible. we will endeavor to do that as well. >> the head of the national institute of occupational health and safety testified yesterday that you are not doing that. will you provide all the information they have requested of you? >> we will provide all information requests we will receive. we will certainly do that for
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them. >> again, the equivocation in your answer is not reassuring to those workers who potentially have been exposed to these chemicals in ways that can impact on their health. bp has dumped 30,000 gallons of drilling mud in the ocean. drilling mud is often made using synthetic oils and other chemicals. in this case, it also may have used substantial quantities of antifreeze, which is toxic. mr. hayward, will you commit to disclosing the ingredients of the drilling mud? >> yes we will. i believe all of the mud that has gone into the ocean is water based mud with no toxicity whatsoever. >> will you also commit to disclosing all other measurements you have made related to chemical, oil, and methane concentrations in the water immediately? >> those are being published as
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we make them on a variety of websites. we will continue to do that and will make them available in whatever form is appropriate to all of you. >> and you will give us all of the measurements you have made? >> all of the measurements we have made have been made available and we will continue to do that. >> thank you, mr. chairman. >> mr. hayward, as is demonstrated by the number of cameras in this room, interest in this hearing is at a fever pitch. the anger at the peak and the anger at our administration is palpable. just look at the polls. we members of this committee have an obligation to get to the bottom of this to address the frustrations of the american people. the chief executive of exxon mobil testified just yesterday at the energy and environment subcommittee of this committee that, "we would not have drilled
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a well the way they did." in addition, the president of shell stated, "it is not a well that we would have drilled in that mechanical set up, and there are operational concerns." mr. hayward, my profession before congress was the practice of medicine -- obstetrics and gynecology. if i had delivered a baby that resulted in a bad in come -- a seriously bad outcome and two of my friendly competitors, well- respected peers, said that dr. gingrey in this instance practice below the standard of care i would be in a serious world of hurt. reflect on the fact that two of your major competitors said that bp drilled a well in a non standard way.
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in retrospect, what is your retrospect of bp's design plan for the well? >> as i have tried to explain, there are clearly some issues that our investigation has identified. and when the investigation is complete we will draw the right conclusions. >> with all due respect, you have had 59 days and you are not exactly moving with a fever pitch here. do you believe bp was drilling the well following the best safety practices? you were focused on reinvigorating those when promoted to the position of ceo. >> i have no reason to conclude that was not the case. i have found no point that anyone in bp could have taken an unsafe action. >> do you believe the decisions made regarding deepwater horizon on and leading up to april 20 --
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a decision to use only six centralize serers instead of 21, the decision not to run a cnet log -- to those reflect a normal decision making process at bp or do you categorize those as an exception to normal operating procedures? >> there is nothing i have seen in the evidence so far that suggests that anyone put costs ahead of safety. if there are we will take action. >> let me put it this way, mr. hayward, in the remaining time i have left. if you had been physically present on that rig along with the 11 men that were killed, would you have made the same decisions as were made? would you have approved the decision to use only six despite the recommendation to use 21? would you have made the decision to not run a cnesegment
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lock? >> i am not the engineer qualified to make those decisions. better people than i were involved in the judgments that were taken. if our investigation determines that at any time people put costs ahead of safety then we will take action. >> with all due respect, mr. hayward, i think you are copping out. you were the captain of the ship. it has been said by members on both sides of the aisle of this committee. we had a president wanonce that said, "the buck stops on my desk." i think the buck stops on your desk. we are not getting the answers from you that need to be presented to this committee in a forthright manner. it is a little frustrating for
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all of us. it seems like your testimony has been way too evasive. mr. chairman, i will yield back at this time. >> i want to follow up on questions about the culture of safety at the peak. you stated repeatedly that say for liable operations are a number one priority, correct? >> you have been c.e.o. for the past three years. >> correct. >> explain why between june of 2007 and february of 2010 the occupational health and safety administration checked 55 oil refineries operating in the u.s.. two of those are owned by bp. bp refineries racked up 760 citations for egregiously willful safety violations,
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accounting for 97% of the worst and most serious violations that osha monitors in the workplace. that does not sound like a culture of safety. >> we address the issues in 2005 and 2006. >> i am not talking about 2005 and 2006. i am citing an osha study between june of 2007 and february of 2010 where osha said bp has a systemic safety problem. of those 760 that were classified as an egregious and willful, it is important to note that is the worst violation that osha can identify. their definition is a violation committed with plain indifference to or intentional disregard for employee safety and health. 97% of all of those egregious violations at u.s. refineries on
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your watch were against your company. that does not sound like a company that, to use your words, is committed to safe, reliable operations as your number one priority. there is a complete disconnect between your testimony and the reality of these osha findings. do you understand that? >> i understand what you are saying. >> we also had mr. barton earlier make this comment about what happened at the white house yesterday. were you there for that conference with the white house? >> i was. >> do you think bp was shaken down the the -- shaken down by the obama administration to come up with this $20 billion compensation fund? >> we attended the white house at the invitation of the government to form a way forward and try to work together to deal with the lead to, the response to the leak, and to try to
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return the gulf coast to its past. that is what we are going to do. >> i realize that we speak the same language but it is not always the same language. when we speak english in the united states and english in great britain -- i want to make sure i am clear on this. in this country, the word shaken down mean somebody in a position of disadvantage is forced to do something against their will. is that how you viewed these negotiations at the white house yesterday? >> as i said, we came together to figure out a way of working together to resolve what is clearly a very serious situation. >> the reason you came together is because it was not only in the best interest of the united states taxpayers and the citizens of this country. it is also in the best interest of bp to try to get this problem solved so that it can move forward. isn't that true? >> it is undoubtedly true. we would like to resolve this
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issue, as with everyone else in this country. >> when the ranking member referred to this compensation fund, which i applaud, as a slush fund, i want you to know that in this country that applies a very negative connotation of something illegal, below the surface of what is acceptable. did you consider this compensation fund for people who have lost their lives, lost their businesses, lost their environment, and lost their ability to earn -- did you consider that a slush fund? >> as we said yesterday, this is our commitment to do right, to ensure that individuals -- fishermen, charter boat captains, small hotel owners, everyone who has been impacted by this -- is kept solvent. that is what i have said from the very beginning of this. that is what we intend to do.
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as i said in my testimony, i hope people will now see we are good for our word. >> can we take that as a no in response to my question that you did not consider this to be a slush fund? >> a certainly did not think it was a slush fund, congressman. >> thank you. i will yield back. >> 94 being with us, mr. hayward. -- thank you for being with us, mr. hayward. earlier this morning, mr. verges answered a question and you responded correctly that everything you do is subject to regulatory oversight. who is that? when you are talking about regulatory oversight. >> regulatory oversight of the deepwater drilling operations is the mineral management service. >> with the federal government, who would be on the rig for that oversight?
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>> it is the inspectors of the mineral management service, i believe. >> i am sure the records are out there. when was the last time the mms was on the rig? >> i am afraid i was not aware of that date. i believe it was relatively shortly before the incident. >> do you know of any citations or issued at the time they were on the rig? >> i am not aware of any citations. >> i know i have talked to quite a few members from the gulf coast and also from news reports. there have been many cases out there where they are talking about it takes almost five days for a turnaround time. i came from local government. there is a chain of command out there in local government and state government. depending what the chain is, they are saying over and over it takes about five days to talk to bp. i was just wondering, knowing
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the times out there, because of these critical matters that are happening -- why is it they say you have to go ask bp and the turnaround takes so long? >> i am afraid i cannot answer that question. i do not know. >> could you get that information for us? >> certainly. >> the next question will probably have the same response. the question is to set the procedure up this way that we would have a situation where it takes a five day turnaround time? >> i am afraid i do not know. >> after the disaster occurred, have you had direct contact with the white house? do you have a direct person at the white house that you deal with when problems arise that you can get them turned around quickly? >> pi primary contact has been with admiral thad allen, the incident commander.
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we talk on a regular basis. >> how often would that be? >> typically once a day or more than once a day. >> as the lady from tennessee -- we have kind of a frustration level on getting some responses. with that, a year -- i yield back. >> mr. heyman -- mr. hayward, you testified that bp has drilled 100 wells around the world. how many are deep water wells? >> i do not know the precise number. we drill deep water wells in many parts oo the world. the thing bp pip wells should be drilled to the highest industry standards -- do you think bp's
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wells, wherever they are drilled, should be to the highest industry standards? as this will was being drilled, were you informed of the progress of the well? >> i was not. >> you were not. before i continue, i know you have had difficulty answering some of the technical questions members have asked you. i know you brought a technical expert with you. would you like us to swear him in so he can answer some of my technical questions? >> i think that depends on the question. >> will see how it goes. you said you received the chairman's june 14 letter, which talks about five decisions that compromised the safety of this well -- while the sun, centralizes, cement, mud circulation, and lockdown. i want to ask a question about one of those issues. that is the cement. the first thing i want you to do
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-- you can take that no book to your left. open it up. in the top flap, there is a memo which was written to richard miller on wednesday april 14. that memo ssys this has been a nightmare well which has everyone all over the place. did anyone inform you as ceo of the company in april of this year that this was a nightmare well? >> they did not. >> did you subsequently see this memo? have you seen this memo? >> i saw this memo when it was raised by your committee. >> that is the first you ever heard of it? >> it is the first time. >> is it the first you heard of it being a nightmare well? >> when i first saw this memo. >> let us talk about the cementing job. all of the testimony we have had in this committee through our hearings, and also at the
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natural resources committee, indicate that the choices that bp made and its subcontractors in order to save money led to blind faath in a successful cementing job. let me walk through it so you can understand. first of all, bp chose a riskier well-designe. chairman waxman talk about this. the best practice would have been a liner and a tieback which includes barriers to prevent the flow of dangerous hydrocarbons to the well head. instead, bp chose a long string approach, which has only to barriers. an internal document at the company warned that this approach was not recommended because, "cementing simulations indicate it is unlikely to be a successful summit job." you can look at had six of the notebook you have in front of you to see that, mr. hayward.
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it says, "cement simulations indicate it is unlikely to be a successful cement job, due to formulation breakdown." this is an internal confidential bp documents from mid april. have you seen this document before? >> i saw it as a consequence of the -- >> you did not see it as the time? but there were bp folks that saw it? >> there were certainly the people said -- there were certainly bp people that saw it. >> there would need to be a remedial cement job. bp chose the riskier approach. bp chose the riskier centralized option -- centralizer option. the best practice would have been 21 centralizers, but bp
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used six. if you look at tab 8, it says on page 18 that you did this even though you're some mentors, halliburton, said this would create a severe risk that the cement job would fail. it says based on -- that it would be a severe risk. bp's operations drilling engineer wrote about this decision, "who cares? it is done. and of story. we will probably be fine and get a good segment job." -- a good cement job." when did you learn about that memo? >> that memo -- i was made aware of it by your committee. >> you would not deny that bp supervisors were aware of that document at the time, correct? >> there were people in bp who
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were aware of that document. >> would you say it is best business practices to say who cares, it's done, and a story, we will probably be fine? -- end of story, we will probably be fine? >> that e-mail is a concern. i would like to understand the context in which it was sent. if there is any evidence that people put costs ahead of safety of will take action. >> i understand. let me finish with the cement. bp failed to perform the most simple test that was known -- the most respected test that was known, the cement bond lock test. there was a contractor on board hired to perform this test, but they were sent away 11 hours prior to the explosion. this test was described by halliburton's chief safety
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officer as "the only test that can determine the actual sickness of the bond between the cement sheets, the formation, and the casing itself." the committee has consulted an independent expert which says this test should always be used. another expert says it is unheard of not to perform this test. he calls this decision, and i am quoting, horribly negligent. i want to ask you a question. do you think as ceo of this company it was a mistake not to conduct the cement test? >> that is what our investigation will determine. >> your answer is that it is a mistake? >> i am not able to answer yes or no until the investigation is complete. >> because your lawyers told you not to? >> i was not involved. i am sorry. >> do you think the evidence shows it was a mistake? >> that is not correct.
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that is not what i said. >> do you think it was all right not to conduct the test? >> i think we need to complete the investigation and determined whether running a cement bond log would have made a difference. >> are you aware of the fact it would have cost $128,000 and taken nine to 12 hours to complete the test? >> i am aware of that fact, yes. >> ok. i yield back. thank you, mr. chairman. quips mr. doyle for questions, please. >> thank you. in your testimony, you said that some of the best minds and the best expertise are being brought to bear on the oil spill and it is difficult to imagine a gathering of a larger, more technically proficient team in one place at one time. i know that is meant to reassure us that everything possible is
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being done, but it makes me wonder who was making these key decision before the accident. one of these key decisions was which type of pipe to insert in the well -- a single tube from the top or a two piece liner with a tiebacks up. the second offers more barriers to unintended flow. on tuesday, the other oil companies we talked to told us they would have chosen that design. looking back at the decision, it seems to have had serious consequences. were you involved in that decision? >> i was not involved. >> were you aware of that decision? >> i was not involved or aware of any decisions being made in this well as it was being drilled. >> we asked senior executives. they told us it was in the english and duck suttles. -- it was andy english and doug
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suttles. were they involved in the decision? >> i would be very surprised if there were involved in any decision. >> we reviewed all of their e- mails and communications. we found no record that they know anything about this decision. we find no evidence they ever receive briefings on the activities aboard the deepwater horizon before the horizon. -- before the disaster. these seem to have been delegated to lower ranking officials. who was the one who made the decision to use a single tube of metal from the top of the well to the bottom? who did make the decision? >> i am not sure. it was a decision taken by the drilling operation in the gulf of mexico. their experts have the technical knowledge and understanding to make decisions. >> you cannot tell us who that person was? >> i cannot, sitting here today, i am afraid. >> i think it is amazing that this is a decision and had
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enormous consequences and you cannot even tell the committee who made this decision on behalf of your company. the reason i am asking these questions is because your industry is different than many. you are not the ceo of a department store chain, where it is fine to leave decisions about running the store to branch managers. if the department store middle manager makes a mistake there is no life or death consequence. what you do is different. you are drilling are below sea level into a region that is more like outer space than anything else. the consequences of that drilling are huge. if the mistake or miss judgment is made, workers on the rig can get killed and an environmental catastrophe can be unleashed. the best minds in senior leadership should be paying close attention to those risks, but it did not happen here. and now we are all paying the consequences because the people at the top did not seem to have a clue about what was going on.
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i am sitting here thinking i could be the ceo of an oil company. i hear pay is a little bit better than for a member of congress. you are not able to give us much information on anything. i will ask you one last question what i have some time. you told us you are doing everything possible to solve this well from leaking. it seems to me what we are left with is waiting for this relief well to be drilled. that is going to happen sometime in august. today is june 17. back in 1979, a well took nine months to cap after drilling several relief wells. that was only 160 feet down into the ocean while this well was more than 1,000 feet below the surface. can you tell us today -- have abandoned any other efforts, and are we at the point where bp is doing nothing until the relief
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well, or are you trying some different technology to kill the well before you get a relief well down there? is there anything else on the horizon? >> i am afraid there are no other options to kill this well. as you are aware, we tried to kill the well using a top kill operation. the pressures in the well are such that it is not possible to do that. we have to rely on relief wells. we are continuing to contain as much of the oil as we can. that operation is currentty containing 20,000 barrels a day. by the end of this month, we will have the ability to contain 40,000 or 50,000 barrels a day. by the middle of july, between 60,000 and 80,000 barrels a day. >> i asked other executives on tuesday -- why wouldn't you just drill relief wells when you drill the main well so that if something like this happened instead of us waiting two or
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three months and watching millions of barrels of oil come into the ocean, destroying our ecosystem and way of life in the gulf coast, you could tell that well in a short period of time? >> i know that would cost you a little bit of money, but in this case it would save billions of dollars. what are your thoughts on drilling relief wells along with maine wells? >> we would need to look at all of the options, going forward, with respect to deepwater exploration. >> my time is up. thank you. >> thank you, mr. chairman. i wanted to focus on the mind- set of bp when it comes to its workers. it is said in your opening statement that you were personally devastated. you attended a memorial service for those men. it was a shattering moment. i want to offer my condolences
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to their families. i can only imagine their sorrow. you are probably not as devastated as the widows that testified before our committee. i asked them what about bp. what kind of contact have you had with bp since the incident -- letters, phone calls, visits? one of them said to bp men never extended a hand or a hug when they attended services. i never saw them after that. i asked, what about you, mrs. kemp?" one man said he was sorry for my loss. he asked if he could hug me. the other gentleman told me who he was. they sent two plants to the service. that is the extent of my
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conversation or any dealings with bp. that is it. do you feel that you owe something more to those women, in terms of expressing something and more? >> as i said, i am devastated. i am certainly devastated. i feel great sorrow for the people who have been impacted. >> the have not heard anything. >> the people who were killed in the accident were not bp employees. they are employees of transocean, another contractor. both of them made it very clear they wanted to deal with the families. we wanted to surprise a support -- to provide support to transocean. we have made it clear we would provide all that they would need for the families. >> let me ask another question.
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there were bp personnel on the rig. we read that oil workers on the rig were held in seclusion on the open water for up to two days after the april 20 explosion while attorneys attempted to convince them to sign legal documents stating that they were unharmed by the incident, and then claimed they were forbidden from having contact with loved ones during that time and were told they would not be able to go home until they signed the documents that were presented with. after being awake for 50 hours, stephen davis caved in and signed the papers. he said most of the others did as well. do you think this is an appropriate way to treat people that experienced that? since you had people on the rig, what was their feeling about that? what is your feeling about that? >> i think it was inappropriate. it has nothing to do with bp.
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>> bp had no comment on it and had no opportunity -- did the commany know about it? >> i think we were aware it was taking place. it was nothing to do with bp. >> i did mention during my opening statement this document that says such voluntary effort shall be at my own risk -- that people were made to sign. there were two court appearances that were needed to finally get bp to take responsibility. what i understand is that bp continued to fail to provide adequate protective gear to the fishermaen. on may 16, osha issued a detailed directive on a training requirement. osha had officials monitoring the training and asserting the cleanup. according to testimony we heard in louisiana, bp still failed to
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provide respirators to the workers exposed to the crude oil and the workers experienced health impact. the workers were afraid to speak up due to the potential to lose their jobs. those fishermen who attempted to where respirators while working or threaten to be fired by bp due to the workers using the press operators. are you aware of that? >> i am not aware of that. we intend to ensure that everyone involved in the response is appropriately provided with whatever safety equipment is required. >> endeavoring to provide -- are the workers currently provided with what they need? >> absolutely. in every case, we are trying to make certain that people do not -- >> you are trying to make certain. is all the equipment there and are all the workers protected? >> to my knowledge, yes. >> thank you. i yield back. >> thank you.
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let us turn to mr. ross for questions. >> thank you, mr. chairman. mr. hayward, since my opening statement up to 416,666 gallons of oil have leaked into the gulf. that was about four hours ago. . . >> it has been pretty consistent today, with the p major exceptions.
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-- up the major exceptions. the level of discontent, anger, and frustration with bp. i also watched this on the news. it seems to me that bp has not been honest with the american people, with our government, and it seems as though you are trying to hide something. sir, it is hard to hide 2.5 million gallons of oil a day pouring into the gulf. we want answers. we want you to be honest and open with us, and want to finally see the kind of transparency that you have been talking about. we have a few questions for you. bp is currently in the process of killing two relief wells to stop the flow of oil, that may or may not work. -- drilling two relief wells that you said would be finished in august. after the two relief wells and the league has been stopped, what does dp plan to do with
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these wells? the plan to put them into production and make a profit of them, or do plan to shut them down after the situation is resolved? >> they will be shut down after the situation is resolved. the first relief well will pump mud down the well. >> a recent article reported that the cleanup effort has created over 250 tons of solid waste and 175,000 gallons of liquid waste that are now being carted away from the gulf coast and shipped off to landfills. bp executives have it stated that this waste, which is admittedly has rescinded struck it to our ocean environment is perfectly safe to dump in our nation's landfills. you have polluted our coast and air with this tragic spill and out you are shipping the ways that you collect and dumping it near our homes and water sources. i want to know where this waste is going, and are you shipping
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it throughout the country? how can we be sure it has been treated and is safe? >> i don't know the details of that, but i can assure you that we will do the right thing to ensure that it is treated in the proper and appropriate way. >> can you provide me and this committee with a response? >> we certainly can. >> that we try this. -- let me try this. this has been asked several times, and i don't and we have got an answer yet. we all know about the e-mail from bp employees expressing their concerns about the procedures, including one from a drilling engineer who described the well as "a nightmare well." how much were the drilling engineers consulted? was this a bottom-up decision,
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or did it come from the top down? >> as i understand it, from the discussion with our investigation team and from the review of the documents, there was a discussion taking place among the drilling engineering team responsible for this well. that is how the decision and the judgments were taken. >> so would you call that a bottom of decision or a top down decision? >> i would say it was a decision taken by the right experts with the right technical knowledge to make the decision. >> in your testimony, you note that you are currently drilling two relief wells which will ultimately stem the flow of oil. previous testimony from bp and trans ocean, we have heard that there are numerous redundancie'' built into all of your equipment and in all of your personnel procedures to ensure that to company does the very best it can to ensure a tragedy like the one we had seen unfold of the past begin nine days does
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not occur. new these relief wells as an on- off switch. are they going to stop the flow of oil into our ocean and their complete? if so, what did you not read real emergency relief wells prior to this whole mess? as before, we are still waiting for an answer. did you do cost-benefit analysis and determine if it was cheaper to drill one well, and then potentially pay a massive sum to clean up an inevitable tragedy? >> we believe that the blowout preventer was the ultimate failsafe mechanism. that clearly was not the case in this instance. it failed on three separate occasions. it failed when it was activated in the drilling rig at the time of the incident. it failed to operate when the drilling rigs separated from the blow up printer, as it should have done, and it failed to
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activate when we had submersible robots at the blowout preventer within 24 hours of the incident. that was the fail-safe mechaniss. >> mr. chairman, i see i am out of time. >> mr. hayward, you said $20 billion in a trust fund, which is a commitment to meet these obligations and not a slush fund, for the record. my question is, our health payments such as for illnesses that residents are workers may develop as a result of this bill covered in your statement to cover all legitimate claims? what about federal and local government outlays of health and other personnel? recovered and to that? >> claims of that sort are
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covered under the fund. >> this is increasingly being called a war. there are calls for it to be bought as such. what is missing from the effort, and do you feel that you need more hands, more people to effectively fight this so-called war and prevent the oil from creating any more damage? >> we have been fighting a battle on three fronts since the very beginning. to eliminate the league, contain the oil on the surface, and to prevent it on the shore. it is now the task of the international incident commander to determine what further resources are required. the conversation we he and i have on a regular basis to ensure that we have the right resources in the right place at the right time to deal with the
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incident. >> as of your last conversation with admiral allen, the sense was that you had all they needed and all the people you needed? >> we are continuing to work the issue of defending the shore, to try and mitigate to the maximum extent possible the amount of oil that comes onshore. that is where regan still do more to defended the beaches. -- where we can still do more to defend the beaches. >> you state in testimony that the events of 4/20 were not foreseen by you, but in light of the several areas of concern that have been raised, shouldn't someone have foreseen and been able to prevent the explosion? i understand there is supposed to be a policy or any one person on rican shut it down if they perceive a problem. is this a real policy, or is it something just on paper?
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that did not seem to happen in this instance, even those some trans ocean, halliburton, an even bp employees reportedly had serious concerns. >> is a policy that is real. if anyone at any time believes that what they are doing is unsafe, they have both the right and the obligation to stop the task. >> are you surprised, given what we are hearing, and i know the investigation is not complete, that no one made that decision to shut the rate down? >> i think in light of what we now know, it was of course surprising that someone did not say that they were concerned, and i think that is to the heart of the investigation, to understand exactly what the events were and why there were not different decisions taken with respect to the event, particularly in the last five or six hours on the day of the incident.
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>> there was a company that was supposed to do -- schlumberger, and we were told that they left because of concern for safety, but others said they left because they were told there were not needed. >> i believe it is clear that they lacked the rate because they had completed the task. the task that they had anticipated to do was not required. >> as far as you know, it was not that they felt unsafe, as we were told in new orleans. >> it was nothing to do, on the basis of anything i have seen, that was anything to do with safety. >> in your testimony, you say bp is a responsible party under the oil pollution act. you distinguish that terminology
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from any indication of legal liability, which is still being investigated. do you think you are the sole responsible party, or might there be others, and if so, who? >> the government has named for responsible parties. -- four responsible parties, and they have all been named as responsible parties in this incident. >> thank you, mr. chairman. >> next would be mr. green for questions. >> mr. hayward, yester day there was testimony that in the aftermath of the exxon valdez accident exxon launched a full
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review of their operations and implement far-reaching actions that today guide every operating decision to make on a daily business -- on a daily basis. have there been specific forms that be he has implemented following the alaska accident caused more >> we have implemented major changes following the incidents in 2006 and 2007. we have implemented changes to our people in terms of skills and capabilities we have. we implemented changes to the training they get and expertise they develop. we have implemented significant changes to all our operating practices, including implementation of an operating management system that covers all the companies operations. it has been a branch review from top to bottom. >> my concern is having followed up the alaskan pipeline and the texas city refinery disaster,
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those reforms have not worked. what will be done differently this time in the last 60 days? has there been some discussion of other reports from the texas city and the alaska pipeline have not worked? you know the information our committee has. he received a letter to days ago on some of the decisions that were made literally on the rig by bp representatives. going forward from here, will we know five years from now that we will not have to repeat what we are doing right now? >> that is why i am so determined to get to the bottom of this incident so we can learn from it and make changes to ensure that it does not happen again. >> what does happen with your drilling procedures internationally? and know there are different standards for different companies. the committee heard testimony from executives a few days ago that typically norway and the
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scandinavian countries have the toughest offshore drilling. i know bp is active in norway. is there a significant difference on what you do in the gulf of mexico as compared to what you do off the coast of norway or great britain? >> we is the same standards globally. the truth is that the rules and regulations, as i understand it, in the gulf of mexico or higher than they are in the north sea on the u.k. sector in terms of the requirements. we will continue to learn from this incident and make changes to ensure that it cannot happen again, and it will be global. >> mr. greenfield's back. -- mr. green yields back.
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>> thank you, i appreciate the opportunity to ask some questions. mr. hayward, yesterday when we had a hearing with a difference of a committee of this bull committee, -- of this full committee, we had for ceo's of other oil companies. i could be wrong about this, but i think they all indicated that either would not have drilled this well or at least would not have drilled it the way be be drilled at. what -- would not have drilled a the way bp drill bit. what is your response to that? >> to compare it with other practices to determine what is the truth, i cannot comment today on that. >> i have had off camera discussions with the number of experts in the drilling process is for the deep gulf of mexico,
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and they all say that bp has a different culture, that for example in most of the other companies that operate in the deep gulf, there are a number of individuals on-site that have what is called a stop order authority. they see something that is going on that compromises safety or integrity, they have the ability to stop production. but i am told that bp doesn't give that authority, that is further of the chain of command. that correct, and if so, is that something that bp may consider changing, given what has happened? >> on a drilling operation such as this, anyone can stop it. the bp man, the trans ocean driller, the trans ocean tool pusher, or the bp world site
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later. it requires everyone to agree to continue. there's one person who does not agree, they do not continue. >> so when i am told that the bp culture in terms of this authority is different, i have been told incorrectly? >> i believe that is so, congressman. >> in terms of the two relief wells currently being drilled, are they being drilled using the same procedures as this well, or are they being drilled differently? in other words, some of the things that were not used on this well, the double casing, things of this sort, are those relief wells going to use these enhanced safety procedures? >> there are areas of concern we have identified. the relief wells are being drilled with all those issues absolutely for most in the procedure.
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the relief wells are rather different because of what they have to do, but all of the things we have learned today from our investigation have absolutely been incorporated into the activity that is taking place with respect to the relief wells. >> have either red or been given a summary of the letter that chairman waxman and chairman stupak sent earlier in the week that lists the five or six outstanding -- what they consider to be the anomalies in this well and the safety concerns? are you familiar with that? >> i am familiar with that letter. >> do you agree in general with the concerns that are raised theire about the lack of a safety, are being employed -- a
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safety collared being employed that could stop the oil and gas minting and is getting at the well that someone recommended 21 or 22, and bp made a decision to only use six. now you know what does happen, do you share some of the concerns that that letter raises? >> i share the concerns about a number of contributing factors that may have created this incident that focused on the cement, on the casing, on the integrity tests, on the well control procedures, and the complete failure of the blowout preventer. they are all areas that i believe we need to understand fully before we draw conclusions about how this accident occurred. >> my final question is, is ibad
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on what you now know, do you agree with the general conclusion expressed yesterday's that this was a preventable accidents? >> i believe that all accidents are preventable, absolutely. >> if i may take a small point of personal privilege, i want the record to be absolute clear that i think because he is responsible for this accident, should be held -- i think because he is responsible and should be held responsible and should in every way do everything possible to make good on the consequences that have if anything i said this morning has been misconstrued, i want to apologize for that misconstruction. with that, i yield back.
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>> mr. hayward, this testimony has been fascinating. we have heard a lot about your desire to come in and improve the safety of operations everywhere in the world, something to that effect. you listed another top priority, to conduct the peak of the business in a way that is in tune with the world without damaging the environment. would you agree that bp did not meet those goals on the deepwater horizon rick? >> i think it is clear that i regret, bp regrets what has happened deeply. >> so obviously, bp id not meet those goals on the deepwater horizon rig. the concern beyond that is there seems to be little evidence
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about how hard the he tried to meet that goal. -- how hard bp tried to meet that goal. we talked about the five key decisions made by bp officials in the days before the explosion. those decisions had to common denominators. they saved time and cut costs, and that each increased risk. i have heard you say over and over again in the course of today's hearings that there has -- there is nothing i've seen in evidence so far that bp but costs ahead of safety. i have to tell you how detached that seems. we have also talked about some of the documents that the committee has unearthed, and document after document that indicated that bp officials in charge of the deepwater horizon were focused on saving time and money. for example, the document that says that the well-designed was chosen because it would save up to $10 million. you are familiar with that
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document, correct? >> i am familiar with that. >> another one says the reason for not using sufficient -- it would take 10 hours to install them. it indicated that you work not familiar with any of this happening before the explosion, you only learn about it afterwards, right? >> i was not familiar with any of the decisions or the documents surrounding this well prior or during the drilling of the well. >> and what is fascinating also is that when you asked about how these decisions are made within the structure of your organization, your referenced this from a perspective of, as i understand it from our investigation, this is how these decisions are made. but you are the leader of the company. you cannot even tell us if they were top-down or bottom-up decisions. your just referencing them based
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on and after the fact investigation. when we talk about these documents that i just reference, the one that says the well- designed was chosen because it would save it $7 million to $10 million, and the other one that says the reason for not using -- it would take 10 hours to install them. none of these documents makes a decision to ensure a safe environment on the rim or protect the environment from a catastrophic oil spill. would you say that is true, that does not indicate a decision being made based on ensuring a safe environment are protecting the environment? >> i don't think it is possible to say that, based on the documents out of context. >> that is why i think there is a real attachment year, a real disconnect. it seems to me there was a disconnect prior to the explosion, and the remains a disconnect when dealing evidence that is very clear and being
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presented. this was a tragic failure. you have talked about your commitment to safety and the environment, but when push came to shove on the deepwater horizon, the companies concern seemed to be the bottom line. i guess this is my question to you, mr. hayward. it was responsible for the failures on the deepwater horizon and the terrible set of decisions that led to the tragedy in the gulf? >> that is what our investigation will determine. that is what is going to do. if there is any evidence to suggest that people put costs ahead of safety, then i will take action. >> so evidence like those documents? >> the evidence from the totality of the investigation. >> as the leader of the company, don't you have to accept the responsibility? you talk about the importance of safety and the environment, but
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he presided over corporate culture for safety and risk to the environment were ignored in order to save a few days and a few dollars in drilling costs. if you are the leader of the company, it don't you have to take responsibility? >> i am absolutely responsible for the safety and reliable operations of bp. that is what i have said all along. >> thank you, mr. chairman. i yield back. >> mr. hebert, is it true that in 2005, the texas city operation on by v.p. blew up, resulting in lost lives of 15 workers? >> that is true. >> and is it true that in 2006, a bp oil pipeline in alaska rector and spilled 200,000 gallons of crude oil? >> that is true.
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>> is it true that in 2007 when you took over as ceo of bp, the corp. settled a series of criminal charges and agreed to pay $370 million in fines? >> that is correct. >> is it also true that in one year, osha found more than 700 violations at the texas city refinery and find be happy with a record fine of $87.4 million -- fined bp $87.4 million? >> yes. >> willful safety violations including the use of else -- similar to those that contributed to the texas city blast.
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>> that is correct. >> is it true as well that the u.s. chemical sector board, which did investigation into the texas city refinery, with the active participation of former secretary of state james baker and -- are you familiar with that report? >> i am very familiar with that report. >> in the report, which i take the view regard as credible -- >> i believe is very credible and it is the basis we move forward in 2007. >> the report greater than greater thanb managep matt allows operators and supervisors to alter, added, add, and remove procedural steps at the texas city refinery without assessing risk. the baker panel examined all of bp's u.s. refineries and found the toleration of serious
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deviations from save operating practices. is that an accurate statement of the findings of mr. baker's report chris or cracks it is accurate, and based on the findings of that report and the instances of 2005 and 2006, we implemented a systematic change in how we manage safety on a systematic change in the culture of bp. that is something we have done consistently over the last three years. >> did that systematic change that you said you implemented as a result of the baker report account for the reason that at deepwater horizon, when faced with the choice of the cheaper and quicker casing design or a saber design, vetoes the cheaper and quicker casing design? -- bp shows that cheaper and quicker casing design. >> as i said, we need to wait for the findings of the
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investigation. >> i am not going to ask you what the reason was, but i am going to ask if in fact, it is not in dispute, that the choice was made to use the cheaper and quicker casing designed rather than more expensive design. i will ask you again, there were fuehrer casing centralized and summer recommending. -- fewer casing centralize there'rs. which choice did beat the bank at deepwater horizon? >> the decisions taken by the engineering team at the time was a technical judgement to use fewer centralizers rather than more. it is not always true that more is better. >> bp chose not to circulate drilling mud that would have cleaned up the well.
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it chose a lighter, salt water base for this amending procedure. is that correct? >> the procedure to displace the mud was a procedure that is not uncommon in the industry. it was a procedure that was approved by the mms prior to implementing it. >> are you saying you made the right choice in this case? >> i am not able to make a judgment as to whether the right choices were made. >> well, you are the ceo. >> with respect, i am not a drilling engineer or a technical qualified engineer in these matters. >> but you are in charge of them. >> that does not mean to say i am an expert. >> one of the frustrations i think folks have is, who is in charge? the baker report said there was a systematic choice being made consistently by bp that led to the loss of life, that lead to pollution, that could be
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attributed to a decision based on state money, increasing profits at the expense of safety, and as it turns out, unfortunately, human lives. i am going to get back to what i asked you earlier. i think all of us live in a world where we per feerick -- refer to have fewer regulations rather than more. we would like to rely on trust and faith and our word rather than regulations and checking over your shoulder and all those things that both sides find annoying. does this eeo who has presided over a company that has incurred $370 million in fines, his company was subject to this report by mr. baker indicating a choice for -- a choice at the expense of safety, does that person who has presided over almost $100 billion in loss of shareholder value and the
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suspension of the annual dividend, who has lost the confidence of shareholders and regulators and most importantly, the families and citizens of the gulf -- does that person enjoy the confidence necessary to continue acting as ceo, or is it time for that ceo to resign? >> i am focused on the response. i am focused on trying to eliminate the league, contain the oil on the surface, and cleaned beaches and clean up the spill and restore the lives of the people on the gulf coast. that is what i intend to do. >> that includes questions by members of the subcommittee. as i indicated earlier, members of the full committee will have an opportunity to ask questions if they so choose. it will be based upon committee seniority.
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>> thank you for allowing me to ask these questions. mr. garrard, i have watched this hearing, and time and time again, you have indicated -- you have responded with this statement, i cannot give you a legitimate answer to that question. he said it over and over again. the have asked for details, and you did not know. did you bring anybody we see that has the detail in permission to help you answer a lot of these questions? >> i have a technical expert with me. >> i do not see you going back to that technical expert, and you just continue saying he cannot answer the question. my question for you today is, is today thursday? yes or no. >> it is thursday. >> next question. the people of florida, when they say there is oil spilling on the coast, would be appropriate to say that is because of bp's
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reckless behavior? yes or no? >> is the consequence of a big accident. there is no evidence of reckless behavior. >> your standing here today saying that bp had no reckless behavior. >> there is no evidence of reckless behavior. >> yes or no, you are saying that bp had no reckless behavior. we had a hearing. mr. mckay was here. we had the ceo of exxon, chevron,, goodfellas, and shell. we ask them questions. --, called phillips and shell. we ask if they would have proceeded, and everyone of them said no. they were asked about safety measures. or the safety -- are there safety measures that your company could have taken to prevent this incident? everyone of them said yes. you are here this morning saying
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your company had no reckless behavior, yet all of your peers, the ceo of exxon, chevron,," phillips, and shell, all pointed out your reckless behavior. later on, alberta and warned that the well could have a severe problem. were you aware of halliburton's warning? what i want to know is, you, in your position, has anyone understaffed 32 about held burton warner company it could have a severe f-bomb -- about halliburton warning it could have a severe incident? a bp official who recognized the risk of proceeding for caution to the went in an e-mail just
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four days before the disaster, stating who cares, it is done, in the of story. did you know about that email? >> i had no prior knowledge prior to the incident whatsoever. >> in light of what your peers have said, dealing with safety, being with the precautions with the pressure test reading, and dealing with halliburton, don't you think there is reckless behavior indication? if what i told you is true, did you think bp had reckless behavior? >> i believe all accidents are preventable. the investigation will determine how this accident occurred. >> you are saying based upon all the information i gave you, you do not think bp at any reckless behavior. that is your position this afternoon, is that correct? >> i have seen no evidence of reckless behavior. >> let's say you were on a ship
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and you ran into new orleans and you spewed all this oil and killed 11 people. do you think the captain of that ship should be fired? has anyone at bp been fired because of this incident, anybody? yes or no. >> no, so far. >> so your captain of the ship runs into new orleans and causes all this damage, and no one has been fired? >> the investigation is ongoing. >> let's say the investigation goes for three years. does that mean you would not fire anybody? >> as the investigation draws conclusions, will take the necessary action. >> in light of all the internal and human damage and just the information from your peers saying you were indeed reckless, and the mails i have towed to, you still are going to stonewall
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us this morning and say basically we did nothing wrong and we are going toowait until the evidence that proves what we did wrong or right. is that correct? >> i believe we should wait for the conclusions of the various investigations before we make decisions based on those conclusions. >> he did answer that today is thursday, mr. chairman. >> the chair now recognizes the gentleman from new york for five minutes. >> thank you very much, mr. chairman. mr. hebert, i am going to attempt to ask some up -- mr. hayward, i am going to tend to ask some of the questions that have not been answered. on tuesday we had the leaders from the other companies and they all insisted they would not have made the mistakes that led to the well explosion. are they lying to us, or are you
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lying to us by telling us that you do not know who is responsible and did not know whether or not bp did something wrong. they are all. bp did something wrong. >> i believe we need to await the results of the multiple investigations before we draw conclusions. i want to ensure that we can learn the lessons and that the industry can learn the lessons. >> i don't understand, is 61 days. what kind of an investigation are you going to conduct? why in two months with all of this oil spilling into the gulf do not have at least a preliminary investigation? >> we are conducting a full and comprehensive investigation that involves a team of more than 50 people. we have share the results of that investigation as they become available with this committee, and we will continue to do that. >> perhaps your lawyers have told you to be very cautious, but it is really an insult for
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you to come to this committee and keep repeating the same thing, evade answers, and just repeat again and again that you are not responsible and that we have to wait for investigation. why did not come testify to this committee after the investigation, it you are not prepared to tell us anything of knowledge now? >> with respect, i was not party to any of the decision making around this well at the time it was being drilled. therefore, i am not in a position to make a judgment about whether the decisions taken with the right ones are the wrong ones. but we have all made a judgment because it is 60 days, an oil is spilling into the gulf. obviously, decisions were made that were wrong. can you not just admit that and say i am sorry? can you not just admit there were decisions made that were wrong, instead of sitting there and telling us you don't know and you have to wait for investigations customer >> i am very, very sorry that this
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accident occurred. i deeply regret for very many reasons. i do believe it is right to investigate it fully and draw the right conclusions. >> what needs to be investigated? what needs to be investigated that has not been investigated up to now, and how long will it take you? >> i cannot answer how long it will take. we want to make certain it is complete. there are many investigations ongoing. there is our investigation, the marine board investigation, and a presidential commission. they will undoubtedly draw important conclusions. >> but you are the ceo. should not set the tone for the knicks investigation before the investigation? should you not say that i demand that within a month we will know what happened? your really insulting our intelligence by not giving us any answers and telling us you
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have to wait for some investigation. i think the rest of the world is not blind. we know what happened, and we know that bp obviously did not do what it was supposed to do. only you do not know that. >> i believe i have set the right tone. i launched an investigation within 24 hours. we have made it open and transparent and we are sharing with everyone the results as they come out. >> let me ask you this. how many other wells busby have in the gulf? >> i do not know the precise number, but it is a large number. >> happily be assured that the same thing will and happen with one of the other wells? how can you give us assurances that what happened will not happen again with several hundred wells? >> the other wells i am referring to have all been drilled and completed and are secure. >> so you are saying that in
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only other wells that bp has come up something that happened to this well could never happen again to any of all the other wells. >> all the other wells have been completed and are secure. >> is that the same assurance that you had said you were going to with a laser makes safety of priority? is this the same kind of assurance your giving us now? but throughout my tenure, i have been very explicit about the priority of safety at bp. is the first word i touch your any time i talked to any group of people in -- the first word i utter. we have made very significant changes to our processes, to our people, and invested very significantly into the integrity of our equipment over the last three or four years. >> that need to say with all due
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respect, like everyone else here and everyone else in america, i am thoroughly disgusted. i think you are stalling. i think you are insulting our intelligence, and i really resent it. mr. chairman, i yield back. >> mr. hayward, this is a picture of an oiled pelican. this is our state bird and louisiana. i keep this on my desk as long as we are battling this as a constant reminder of what is at stake. i want you to keep this in your mind as well, to recognize we are not just talking about the loss of life, which is tragic. we are not just talking about the oil that is still spewing out of that well. we are talking about our way of life, not just in louisiana but all along the gulf coast. i would hope you keep this image in your mind as a constant
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reminder of what is at stake and what we are battling on a daily basis. our two priorities are doing everything we can to make sure that you kept this well, but also to battle as strongly as we can to keep the oil out of our marsh and art deco system. we do not want to sit back and wait until the oil -- out of our march and i work ecosystem. we want to be proactive, but we are having problems on the ground being proactive because of the delays. i was on grand isle friday. the biggest complaints from my local officials or that they are spending more of their time fighting bp and the federal government than they are fighting the oil. this is unacceptable. and now you talk about all the things you are doing, but is not enough. we need a more urgent sense of response to this disaster. i want to ask you what you are going to do to help speed that up.
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when our local officials tell us that when they have basic questions that need answers to, it takes at least five days. a first, the coast guard, then they are sent to bp for approval, then they go around in circles and they never get those answers. this is just not an acceptable way to run this operation. when we hear who is in charge, i want ask you, who is in charge on the ground? >> the national incident commander is the person in charge of this operation. >> so is the federal government telling you what to do, or are you telling the incident commander what to do? when our local officials need something approved, they are getting the run around in circles right now. >> we are trying very hard to do better. we are operating under the direction of the federal government. >> let me example. when our governor came with an idea, this was over a month ago
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now, he had an idea to have the sand barrier plan. they laid it out and actually made some changes. they worked with scientists and engineers. over three weeks went by before eating approval. our entire delegation signed a letter and tried to get the president engage in breaking to this day, only 25% of that plan has been approved. is that you that is not approving the other 75%? is that the federal government? it is not approved to this day. >> the approval process flows through -- >> is it you or the federal government? >> the ultimate approval process is with the government. >> so the federal government is the one that has not approve the other senate by%. >> i cannot speak to the details of the other 75%.
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>> and our governor ssbmitted this to you. >> we have committed $360 million to build a large part of the barrier island. >> it is not a large part. it is 25% of the plan. let me go to another question. they do not have any kind of approval of a seafood safety plan. was that submitted to you, is that the federal government or bp that is not approving it? no one is held accountable when things did not happen. we do not have time for these games to continue to be played. we cannot have five days go by because an answer -- before an answer is given, because the oil is coming every day. there is no plan of protection along any part of grand isle. there is an area called barataria bay.
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a week ago, there was no oil there. that section was scheduled to be covered by the plan, and now there is thick oil coming into barataria bay, when we had a plan a month ago to keep the oil out of there. when people are hearing that everything is being done, i am telling you, on the ground, it is not getting done. i don't know what you need to do differently, but you need to do something differently. it is not yet that is blocking it, you need to tell somebody, because it is not getting done on the ground. we do not have the luxury of time. this should not be happening. we put plans in place to stop this from happening, and our plans are not being approved. i would love it if that was because there were better alternative is being offered, but there are not any better alternatives. we are just being told no,
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without any other options being presented. if you have a better option, present it, but otherwise, we do not have time to waste. >> i understand your concern and your anger. >> i help you make the changes that are needed. we do not have time. we continue to get flooded with ideas of how to stop the oil from coming into the marsh, how to cap the well, and other ideas. none of the ideas are getting done on the ground. this is a data base of ideas with links, schematics, a number of different ideas that should be done that can stop the oil from coming into our markets, but it is not being done. we do not have time to waste. i am going to ask you to move swiftly on this. a lot of local people are not even able to be employed in saving the march. they want that done. we have a lot of ocean out there
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that has oil. we want you to use every opportunity to fix that, so i am going to get this to you. >> mr. hayward, a $20 billion of compensation fund is a good first step, but it is just the beginning. you are going to have to fully compensate everyone who has been affected by this disaster. this week, bp announced the first installment of the $25 billion fund within a broader $500 million commitment to the gulf of mexico research initiative. is bp still committed to putting the full $500 million, not just the $25 million installment,
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toward this initiative? >> we are. it is an initiative that will take place over 10 years. >> when will we see the details of this entire program? >> is being worked by the experts currently. we think it is important to have a program that has firm scientific foundation. >> are these your experts, sir? >> no, these are independent scientists from across the united states. >> i would request that you submit to the committee the list of export you have that are developing this program. >> we would be very happy to do that. >> will there be further scientific investments that will make available to the research community, further investments of dollars? >> we have set up the $500 million initial fund, and i think we need to see what the scientist decide. >> your commitment pales in comparison to the $1 billion
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exxon spent on the valdez spill 20 years ago, which was in a more remote location and your people were apparently impacted by that one. so you are going to make all the data from this research available to the public? >> it will be fully open and transparent. it will not be bp's data. >> the federal government has developed a training class is to provide the necessary training for workers and volunteers to work cleaning up oil from your spill. we continue to see reports that bp is not following the training guidelines, in danger and further the health of these workers now and long into the picture. why are we still hearing these kinds of reports from the people who are out on the water and on the shoreline? >> we are doing everything we can to train everyone involved in this, as well as clearly and properly as we can. >> are you using the federally
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developed courses? >> we are using osha guidelines to establish what is the appropriate training. >> i want to ask you about the response plan which was clearly inadequate. this committee learned this week that the other major oil companies rely on the same response plan that practically identical to your own. the same contractors seem to have written your plan and their plans. they hired the same contractors, apparently as you did. you all appeared to have the same technical experts and the very same response commitment. if this spill had happened to different oil company, the have any reason to think that they would have responded more effectively than bp has? >> i cannot really comment on that. all i can say is that we have initiated the biggest spill response in the history not only
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in america but of the world. it involves thousands of vessels, 35,000 people, and it is the largest activity of its kind ever conducted. >> i appreciate that. the federal government of this country has also initiated the largest response ever on behalf of any kind of natural disaster or man-made disaster in history of this country as well. finally, that to my original question on that topic. the ceo of exxonmobil was at the same question i just ask you. he said that exxon, his own company, is not prepared to deal with a large spill if it happens to them. he also said that the response capability to prevent the impact of this bill does not exist. -- impact of a spill does not
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exist. this is the same response manual that your company has, with respect to his own company says the impact -- the capability does not exist and probably never will. i question to you, do you agree with him about this? >> i agree that there are many missions in our ability to respond to an incident of this type -- many lessons on how we can build better response capability in the future. as i said, we are doing an extraordinary spill response, and i regret that it has not been more successful so far. >> mr. gonzales for questions, please.
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>> that me ask you, there is a six month moratorium on deepwater drilling. do you think that is reasonable under the circumstances? >> i think it is important that the lessons from this are learned, and clearly that is a decision for the authorities take, not for me. >> i am not asking you to make the decision. i am just asking your own opinion based on your expertise and your position. i would assume that you would have an opinion on whether that is a prudent thing to be doing. >> i believe it is prudent for the industry to take stock of what has happened here before it moves forward. >> you know there are calls to move expeditiously to lift that ban after accomplishing what ever is supposed to be accomplished in order to give people peace of mind that as we drill, we are not going to have a recurrence. when you think it would be appropriate to consider lifting the moratorium? >> i do not think i can make a judgment on that today. >> what would common-sense tell
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you? >> i think when we have understood clearly what happened and what better response is required in the event that something like this ever happen again. >> i am hoping that everybody is going to be on that same page. is fundamentally sound. we have that other members that made reference to the hearing we had a couple of days ago. shell, exxon, chevron,," phillips -- they all said -- i will tell you this, they would not give me 100 percent assurance that they could -- that this would not happen if they were drilling in deep water. all i was trying to get is, let's be honest with the american people that there is risk, and it is calculated risk. we can provide enough assurances that it is a risk
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worth taking, then we will be out there. they would not do that, believe it or not. i am hoping that it will not play that same game. but they did say was, it would never have happened, because their manor and fashion of drilling is different than what your doing. do you really believe that the way they explore and drill in deep water is substantially different than what you are doing out there? >> not to my knowledge. >> i tend to agree with the. let's talk about planning. as far as what exxon's ceo and said, we cannot deal with something like that if it happen. that is an incredible statement to make. . .
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>> this blowout prevernt. it is the ultimate fail safe, and you use that term and tums back to what haunts exproup i'm curious about blowout preventers. i was thoying, my staff was giving me information, if you have a surface well, you have a 10,000 pound per square inch moout prevendor. shall hoe water, 10,000 pounds per square inch. deep water, 15,000 pounds per square inch. i'm for the an expert -- why? what is the difference? as you go into depth, why -- why a greater capacity sf >> because of the preb your of the res vaws that we're drilling. >> which then leads me -- what do you think you're dealing with? at that depth, what per pounds
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of square inch? >> we're dealing with 11 or 12,000 pounds per square inch and we have a whoout preventer rated for 15,000 pounds per square inch. >> i don't know if it is cameron that builds these preventers, that's a company someone told me. they're working on a 20,000-pound per square inch preventer. you're aware of that? >> yes. >> while there's much discussion and ongoing effort to provide guidance for equipment greater than 15,000 pounds per squarism, in the interest of expediency it was decided within cameron to amy current design codes and practs. the 30,000 pounce per square inch preventer was qualified for a.p.i. it means basically but for the
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sake of expediency concerns me. why were you looking at 20,000 pounds per square inch when you believed you had 15,000 exceeds what you -- what is required. >> i'm not certain, i think that's referring to a blowout preventer with res vaws with greater pressure. one of the most important things to come from this incident is the requirement for the industry to step back and redesign the fail safe mechanism is uses to prevent accidents of this. we need a redesign of the blowout preventer. it is something that b.p. will take an active role in. we have begun the process with a number of academic institutions.
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>> thank you for you patient, you usually say better late than never but not this time. >> before mr. emsly, we should -- mr. squeeze submitted a c.d. and a resolution from the state senate. he will provide copies for the record. so unanimous consent will be provided as part of the questioning and made a part of the record for 10 days. so ordered. >> mr. emsly, questions please. >> mr. hillyard something you said earlier was astounding to me. you said there was no evidence to date that there had been any decision made based on cost. no decisions were made in an effort to reduce costs. i want to go through this. i think there's something pivotal in this investigation. the facts are clear this you hired halliburton to give you advice about this.
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mr. gagliona did an analysis and concluded you needed 21 centralize es to make sure the rig was safe. to relieve doubt as to why that's important, the petroleum institute recommended a practice of 65, says quote, if casing is not centralized, it may lay near or against the bore hole wall. it is difficult if not impossible to displace mud effectively from the narrow side if casing is poorly centralized. this results in bypassed mud channels and inability ability to achieve zonalization. the experts say you need 21. then if we put up the first slide, a employee wrote to the expert and said we got six. and we don't have time to deal with this problem. the time for british petroleum was money. this rig was 45 days late.
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it cost $10,000 a day. it meant money. what happened then? another person sent a memo saying, we need to follow the model. he kicked it to mr. guide. if we could see the slide. mr. guide said i don't like the fact this'll take 10 hours to do, even though another person said we could fly 15 things in and they could be here tomorrow morning. and mr. guide said, i don't like the 10 hours. it didn't happen. and then the next response from british petroleum, next slide, please was an e-mail. it reprimanded the other b.p. person saying, even if the hole is perfectly straight, a straight piece won't center the hole unless it has something to centralize it. you have to have the right centralizers. he went on to say, who cares, it
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is done, end of story. we'll probably be fine and we'll get a good cement job. what happened then. that's not the end of the story. he then ran further computer models and -- the last slide. he concluded -- this is hard to read but i'll read it. he concluded that this -- this well is considered to have a severe and severe is all capitalized in his memo, gas-flow problem. it is clear to me reading this clear evidence that in fact the decidings were made because -- decisions were made because of costs. people didn't want to wait to get the centralizers needed to safely do the job. your statement there's no evidence that cost led to short cuts just doesn't ring true with me. isn't it pretty clear that the -- there were cost decisions made that had -- that had -- sub optimal at best, number of
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centralizers in place -- and placement in this well? >> >> there i genuinely believe that until we understood all of the things that contributed to this accident, it is not -- it is not easy to say. what i would say is if -- if there is evidence that costs were put ahead of safety, i would be deeply disturbed and we would take action. >> let me ask you about that action. we just read the e-mails, everybody in the room knows what happened reading these. you know what happened reading the e-mails. are you going to call the employees involved when you leave and say, this is an ongoing operation, and tell them they got to change their attitude? are you going to take action based on these e-mails today? >> we'll take action based on our investigation, which puts all of this together and as --
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as -- as it unveils clear conclusions, we will take action on them. >> let me suggest another action. we asked petroleum what it has been on research and development regarding safer offshore drilling technologies. you gave us the number. it was did $10 million a year. that represents .003 %. of british petroleum revenues. that doesn't sound like an accurate prioritization. how does it compare to your compensation? >> in what? is the question -- excuse me. >> british petroleum is investing $10 million a year in safer drilling tech followings. how does that $10 million a year compare to your compensation last year? for instance. >> my compensation last year was
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$6 million. >> forbes reported it at $33. there must be a misunderstanding. stock options don't count. >> my compensation was recorded at $6 million. >> do you think british petroleum should develop safer drilling technology and do you think you oweethat to the american people at this point? >> the answer is yes. we undoubtedly will do that on the back of this accident. >> we hope that will be expeditious and you canful. thank you. >> questions, please. >> thank you. mr. hot day hayward how many deep water operations do you have? how many rigs? >> it is probably the order of 15 or so. >> 15 or so.
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>> is there -- one of the things i run into and -- mr. scalise alluded to it. we have had in my office over 600 requests for submissions for products and ideas and concepts, ways to cap the wells, et cetera, et cetera. basically and of course because of ethics, we -- we can't and won't go in and make anybody meet with anybody. so we just refer them into them. the best i can tell is that -- maybe three out of the 600-muss have received an e-mail back, thank you for your submission. no thank you. there seems to be a closed loop of vendors you're dealing with. is still wide open. when this accident first occurred, everyone said, we're
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going to take whatever ideas and suggestions or whatever. the copper dam, the -- the top hat, whatever. but, i have seen some people that have called me and we referred them in. they have never heard once from your company. is this just -- if you're not a vendor with us before, we're not dealing with you? or are you going to the vendors and allow them to select who they deal with? my reason is, if there are good ideas out there, why isn't somebody looking at them? >> we're trying to engage with everyone who has a good idea. we have been -- been frankly inundated with hundreds of thousands -- >> i know there's tremendous amount. i know the first one that i saw was wrapped with sheets around a cord hanging with your milk cartons. i understand that. those are easy to go through.
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let me -- let me shift to another gear. do you believe that this administration's moratorium is as a result of the tragedy that occurred on deep water rising? the fact they put it in was strictly because of -- what went wrong in deep water? >> i don't know that. i -- i believe that's the case. and i think it is -- probably the right thing to do until such time as we have greater clarity. i agree with that. >> i don't agree with the moratorium. as i expressed to my friends, it is really difficult for us in louisiana to stand in oil and say, we'll take more oil but it is because of the economy, it is because of the jobs, we have supported, i have supported the industry. i support the people. but it makes sense that -- that b.p. bear the responsibility of
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the economic hardship associated with this moratorium. i think y'all put 100 million aside for lost jobs. i'm told that in a given month -- i don't know if this is just louisiana or offshore louisiana or offshore -- but it is about $350 million a month in wages. are you and your company going to take responsibility and make sure that these companies that fold up are -- or these companies that have financial hardships and particular my their employees that they're going to lay off will be compensated in some way? >> we have made a contribution -- having been asked to by the government, to a fund which will be part of the ffnding for that issue. >> the -- do you think $100 million is adequate? you have been in the oil business for quite a while. those are good paying jobs,
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that's why we want to keep them. >> we made a contribution and set aside $20 billion for claims. >> $20 billion for everybody else with business and otherwise. i'm concerned also with them. you know, mrs. rosto and mrs. kemp were in the area the other day. very brave women, especially so soon after the deaths of their spouses. you know, after hearing them share with us the questions they had for your company, i like to hear your response. miss rosto's husband told her the well was losing mud. it was well known among workers as a sign of a problem. she wants to know and asked this question at the hearing is -- why is your company -- wasn't
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working harder to fix the problems on the rig in the weeks before the explosion? why wasn't your company prepared for a blowout? >> i think as i have said, we want to understand exactly what happened such that we could take the right actions going forwards. i'm not aware of that, that the -- what you just raised. the investigation will determine -- whether or not what -- the multiple investigations -- >> and the investigation, excuse me, the investigation are not going to bring back those 11 men to their kids. not only were these women concerned about your company's preparedness, they were concerned about the values. they wanted to insure that rigs were kept safe and were told that b.p. should be he tell held accountable. mrs. kemp asked why money is more important than someone's
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life and so i guess, on behalf of miss kemp, how do you respond to that? >> it isn't -- it absolutely is not. as i made cheer since i've been in this role, it is -- clear as i've been in the role, it is something i've believed in for a long time. safety comes before everything. i believe it passionly. >> the women talked about anyway that testimony i have gone over my time. >> fin your question. >> the women talked about in their testimony that their husbands worked for -- the drilling rig company, for transocean and that they pushed safety. they pushed safety. they pushed safety. in discussions in weeks prior to the explosion their husbands talked about -- about b.p.
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waiving it and saying keep going and keep doing. i mean, i have heard growing up that the tool pusher or the drilling foreman and the company guys getting in fist fights. was there any instances to your knowledge or have you discovered that there was a direct order given by b.p. that says keep going. i don't care what is going wrong. >> i haven't seen evidence of that whatsoever. i believe the operation on the rig in the days leading up to the incident and in that day was carried out because everyone agreed on the rig to move forward. >> thank you. >> questions, please? >> thank you, mr. chairman. mr. hayward i like to start out
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by expressing anger and frustration of the hard-working people of my home state of florida at the catastrophe b.p. rendered upon our state. and all of the small businesses, the fishermen and the mop and pop hotel owners. you know, we were just coming out of the most severe recession in our life time that happened in 2007. things were getting better. this is like a sucker punch to the gut. to learn that -- that this tragedy is a result of b.p. elevating profit considerations over safety. you know, for a decade, many in florida have opposed this -- this drum beat to bring the oil rigs closer to our beaches. over time, we haven't industrialized our coastlines like other states. we rely on tourism and clean beaches and water. we really fought it off even in
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the face of very well paid lobbying campaigns and ad campaigns and with a lot of representation that this is safe. this is safe technology. whether it is in deep water or in shallow water. so mr. hayward, i'm trying to understand how b.p. either was so unprepared for the possibility of a blowout or ignored the risks because according to the minerals management service study conducted, 126 blowouts have occurred at offshore drilling faciles in the continental shelf since 1971. in 1979, a blowout at the oil well if the gulf created a disaster that flowed complaintuously for 290 days. and -- mr. hayward, you said that -- that the chances of a blowout and explosion like the one that sank the deep-water
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horizon rig were one in a million. over the past 40 years, there have been 126 ploouts in the u.s. waters alone. that's roughly three blowouts per year. and how -- how could an average of three blowouts every year for the past 40 years not have registered as more than one in a million chance of risk for your company? >> with respect -- with respect, congressman, i think what i said was the integrity rating of the blowout preventer was of the order of 10 to minus five and 10 to the minus six. that's to say it was designed to fail between one in 100,000 and 1 in a million times. >> that's an acceptable risk? >> it is the risk that b.p. and the industry more broadly use to assess the fail-safe mechanism called the blowout preventer. >> i know you rely on these and
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you call them fail safe, but they're not fail safe at all in the face of what -- what we have discovered through our committee's examination and the statistics. this commit toy reviewed the oil spill response plan for the gulf of mexico and not one time in the 582-page plan does b.p. lay out a message for a gusher after a blowout occurred. your company conducted the planning as if a subsea blowout wasn't even a possibility. in a recent interview of the financial times you admitted what is undoubtedly true is we did not have the tools you would want in your tool kit. my question to you is very simple. why not? why weren't you prepared? why duel vate profits over -- duel vate profits over safety? >> i don't believe we did. what i was referring to in the article was the complicated
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engineering problem we were faced with after the rig sank. we had a well and riser and rig on the floor. we didn't have the pieces of equipment instantly available to cut the riser, to cut off the top of the rise herb and find a way to intervene on the well head. that is indeed true. >> mr. hayward, for years -- big oil companies and -- your allies have claimed that drilling is safe and -- you want to come closer to florida beaches and you say it is -- it is safe, deep or shallow, there's no problems. but on the other hand, we have heard that -- over and over again, over the last couple of months, this is complex and this is dangerous. it is dangerous to drill miles below the ocean. bfment b.p. officials said it is like operating in outer space. given the difficulties and complexities, and what you knew
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about the risks, why you would assume nothing could go wrong. the double speak is tiresome. i'm dismayed and disheartened by -- by what happened. and the elevation of profit over safety. i can only hope that this disaster will motivate us to reassess our priorities and implement a clean energy policy for this country. thank you. >> that concludes the questions of the committee. there's a few more questions. a couple of members that have follow-up questions. we're going to go through a quick second round if we play p-. >> mr. hayward, you said your priority, your top focus is on safety and you feel very passionate about it. except for your statement to that effect, i see as you have said over and over again today,
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no evidence of that. the -- you and other senior officials seemed oblivious to what was happening on the deep-water horizon rig. you weren't following the progress. you weren't aware of the risk being taken. in answers to questions you said your top officials under you, mr. english and mr. sutels, you would be surprised if they followed the happenings on the rig. you couldn't answer but you would be surprised if they followed the activities on the rig. who was following the activities on the rig? you said there were -- people there who were the experts in their field. i -- i just find it shocking that -- that when the potential consequences of a mistake on a
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deep-water rig are so enormous and you have a high passionate commitment to safety that you seem so removed. i think operating in a deep-water environment is like operating in outer space. yet you seem to think that all is going to be taken care of in time. you said there's a team of the best minds in the world working on how to stop the oil spill. where were they in your company paying attention before this spill? you were oblivious, so were other senior fimples. i think this was a fundamental mistake in -- in -- in management. let me ask you that. do you think there was a fundamental mistake in management not to know? >> i think as i've said that we made it very clear that -- the focus in the company is on safety. what management can do is insure that the right people with the right skills are in place, the right systems and processes are in place and the right
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priorities in place and the right investment is available to insure that the plant we're operating has integrity. >> you felt confident that the people that were making these decidings and we went through five in our letter to you and many members sdd you about some of these decisions, that the right people were making those decisions. >> i believe the right people were making those decisions. >> you have no evidence that they didn't. that seems to be your position today. is that right? >> in this stage of the investigation, it is premature to draw conclusions as to what was and was not the right decision. >> it is premature. what investigation or investigations are taking place? >> there is the b.p. investigation and marine board investigation and the presidential commission. >> will you cooperate with all of them? >> yes, as i have with your
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committee. >> i question your coorprigse, i heard very little answers today from the questions, when asked whether b.p. made a mistake in well design. you said you haven't reached a conclusion. mr. dingle asked if costs were a factor, you said you didn't know because you weren't there. and mr. doyle asked you who made the well design decisions? you said you didn't know. our committee is doing an investigation. the reason we're going an investigation, is we want to know how this happened so that we can make changes in the haw and the procedures -- law and procedures if we're going to allow further drilling. don't you think you would be forth coming? >> we would be as forth coming as we can be. >> give me the too many horizon. you had 60 days to do it. is it going on now? >> it is ongoing.
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we want to have access to all of the evidence before we make the final determination. but as we have made clear -- >> give me estimate of when that will be concluded. >> one of the most important elements, the blowout preventer, it remains on the seabed and it feeds to be examined. >> we'll put that aside. how about the other decidings before the explosion about the casing, about the centering of the well and all the other things. have you reached any tentative chattanooga that is you could share with us. >> as we shared recently, we have identified certain areas of focus in the investigation and we will continue to share our understanding and thinking with you as that develops. >> you were asked if there was any action that appeared, that -- if there was action to -- to
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-- you said there's no evidence. there's certainly evidence, isn't there? >> there were decisions made bit people at the time and some of them -- sitting here today, they may have been to do with money. it is not clear. the -- >> and it is not conclusive but there's evidence. >> the decision for example to run a long string versus a liner was -- was -- as it shows in the document that you highlighted to me, a decision to do with the long-term integrity of the well. >> there's evidence that points in one direction and evidence that points in another direction. you take the evidence and reach
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a decision. that's not to say there is not evidence when we have clear examples. >> let me ask you this, you can't give us a time for when this -- when this -- when this investigation is going to be complete. so we're relying on you to do your own investigation. why should we rely on you to do your own investigation? i don't think you have a terrific record of reliability that should give us comfort to have us step back and just wait to get answers from you until you have done your own investigation. why should we rely on that? >> we're clearly not the only people doing investigations. all i have committed is as our investigation proceeds, we will share with you all of our findings. >> in conclusion, we delayed this hearing today sow could be prepared. we sent the questions in advance. you consistently ducked and evaded the questions.
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there may be a reason you think this approach makes sense. but your evasion will impede our efforts and make it harder for us to draft appropriate reforms. i think that's regrettable and unfortunate approach for you to take for the work of this committee. i'll look forward to seeing what you come up with. we'll get evidence. i like for you to submit for the record, the names of the validuals who made those decidings in each of the areas that were under discussion in the letter we sent you. would you be willing to do that? >> we'll make that available to you. >> thank you. >> as we have made everything to my knowledge available to you. >> maybe they'll have answers. thank you. thank you, mr. chairman. >> mr. burton for questions? >> thank you. we're about to finish up this hearing. we do appreciate your patience
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in listening to the various members of the subcommittee. what -- what one or two recommendations are you prepared to give about what we could do to prevent a future accident of this type? now you know what you know and you have listened to what the congress knows here today, are there one or two things that you like to suggest for consideration to prevent an accident of this time from happening in the future? >> i believe that the most important one is to take the fail safe mechanism, called the blowout preventer and design it so it is fail safe. the reality in all industrial accidents is that they're always a combination of equipment failure and human judgment. and the most important thing is to have in place a system that is genuinely fail safe. it is clear based on -- on our
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experience of this accident that the current design basis of the blowout preventer being used in the deep water, not just in this case but across the world, is not as fail safe as we believed it to be. i believe that's a very important lesson that the industry needs to grasp along with the relevant regulatory agencies. >> much has been made of the -- of the complexity and the -- the risk associated with drilling these deep wells. would you care to -- to, i have asked some of your subordinates to give us an assessment of the potential size of this particular field or this particular well. i have asked the texas railroad commission and the texas u.s. geological survey what the largest onshore oil well in texas in its history of over 100
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years has been. with the exception of the initial discovery at spindle top in 1901, we can't find a record of any well onshore texas which is the number one oil producing state in the country, with the exception of alaska for a few years, that flowed at 50,000 barrels a day. the latest estimates are that this well in this condition -- could be flowing as much as 50,000 barrels a day. if you strap hate that on an annual basis, that -- that is over 100 million barrels of oil a year. could you -- could you give us an assessment of why -- why b.p. and other companies go to such extraordinary measures to drill in these areas?
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what is it you think you found or were hoping to find in the gulf of mexico? >> in absence of this well, we believe that the -- that the discovery was of the order of 50 million barrels. >> 50 million. >> 50 million. that's the estimate of the discovery that this, the size of the discovery that this well >> so, if you -- at the rate it is flowing, it ought to peter out fair my quickly. 50,000 barrels a day is 350,000 barrels a week. which is 3.5 million in 10 weeks. which is -- 35 million in -- in 100 weeks. so within -- it -- it would, i was told it was on the order or magnitude of 500 million barrels. >> that's not correct, congressman. this is a discovery based on the -- on the -- on the well and the
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seismic information we have available to us. >> it is just to the extreme pressure, i mean it couldn't flow at this rate -- in full production. >> that is it. >> is that a fair statement? >> that's correct. >> could you tell us what it would flow at? what you expect it to flow at per day? >> i think as a producing well, properly completed we would expect it to be between 15 and 35,000 barrels a day. >> lastly, with the moratorium that is currently in existence in the gull of mexico, from the -- gulf of mexico, the six-month moratorium. we want you to stop the spill and clean it up, but there are other &s that -- that -- other areas that could be explored. what areas might b.p. go to instead of in the gulf of mexico?
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>> well, we have -- we have deep water drilling exploration and production operations in -- in a large number of locations around the world. in west africa and brazil roux egypt, to name three. as well as the u.k. and north sea. >> you would focus on those areas if this moratorium continues? >> we -- we are focused today on the relief wells. >> i understand that. >> and youeo you should be. you better be. >> i haven't -- i haven't thought frank my beyond dealing with the relief wells in terms of their activity in the gulf of mexico. >> thank you, mr. chairman. >> thank you. >> mr. hayward, line of questioning throughout the day, you referred to the blowout preventer. mr. gonzalez, when he asked questions and mr. barton asked questions on there. back on june 4th, you wrote an editorial to the wall street journal. you stated, we in the industry
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have long had great confidence in the blowout preventer as the ultimate fail safe piece of safety equipment yet on this occasion it failed with disastrous consequences. do you believe the the blowout preventer should be considered the ultimate fail safe? >> i believe so. either that or some similar mechanism. >> i'm surprised by your comments because the committee received a document and you have the document binder there, you play want to refer to it that evaluated the blowout preventer used on deep-water horizon rigs. it was prepared in 2001. it is tabbed 14 there and we put it on the screen. in 2001, when transocean bought the blowout preventer. i want to show you the executive summary in which b.p. participated with it in this review. it says engineering and operations personnel identified
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260 failure modes. you see where it says that? toward the top third? okay. so b.p. engineers helped identify these 260 failure modes. how can you write or testify but how do you write in the "wall street journal" two weeks ago that the blowout preventer was the ultimate fail safe when your engineers examined it nine years ago and found 260 failure modes in it? how could you say it was ultimate fail safe? >> i haven't seen this document previously. i apologize for that. i haven't. >> now knowing there's 260 fail safe modes in this, that was on deep-water horizon. it wasn't. >> it is designed to be the ultimate fail safe. it is the design basis. it is what the industry operated for 30 years in deep water. >> let me ask you this, as the c.e.o., why then would your company change the blowout
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preventer fail safe methods or mechanism for instance, we found -- we found other things that showed that this blowout preventer was not fail safe at the first hearing may 12th. i asked and revealed, the blowout preventer was modified in ways that wouldn't work. one modification was to repositive an important variable ramp and replace it with a test ramp that made it ineffective in case of an emergency. at our hearing, i asked mr. mckay, he's the president of b.p. america, about these modifications. he testified under oath, he took the oath, he said he didn't know anything about modifications. we since learned that b. pfpblet approved modifications despite being warned that it would reduce the safety of the blowout preventer. i like to display, again, tab 10. here's the letter from 2004 from
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transocean, sent to b.p. that p.p. signed and acknowledged. it is -- it says, b.p. acknowledges that -- that the conversion -- conversion you asked for, the conversion will reduce the redundancy of the b.o.p. and potentially increasing the contractor's risk profile. so, what does that mean? b.p.? that you reduce the -- you reduce the build-in redundancy and decrease your risk. you asked for modifications which -- limited the redundancy and increase your risk, right? b.p. did. >> i haven't seen this document previously. what i know, there were mod ficks made to the blowout preventer, in particular a test bore ram was added. with the subtraction -- it was an addition.
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>> we find out it is modified, we ask your representative, mr. mckay, he says no. we get done with the hearing and get documents b.p. asked for it and was warned that the fail safe system, the way they wanted it modified would increase the risk. how can by write an editorial rblings how do we write an editorial saying this is the ultimate system and even your own engineers said there's 260 different ways to fail? then you add more to it. go ahead. >> the blowout preventer is designed to be the fail safe meck. -- mechanism in the industry. >> that's been the case since since ploout preventers. >> you have been head of exploring, exploration and drilling and all of this, does it make sense to you that this is the ultimate fail safe system when there's 260 different ways it can go wrong. plus your company modifies it
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and increases the risk of things gone wrong. >> the fact is, it is the ultimate fail safe mechanism. >> let me ask you this, in november, okay. this well, you started drilling it last fall. the well last fall. -- it was damaged in the hurricane. you replaced it with deep water horizon. in november of last year. transocean pulled out the blowout preventer from the ocean floor because its rams weren't working. the lower an lar wouldn't work. and the upper one was stripped through, through, during a well control event. we know that b.p. was aware of this because transocean and again document number 12 there in the binder reflects conference calls with b.p. about the problems with the blowout preventer. in addition traps ocean records indicate the incidents state that the estimated down time forced by the malfunction is a
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conservative 10 days at 44,000 dollars per day or $4.4 million as it shows. how could you say blowout preventers are fail safe devices when the blowout preventer you're using in november had to be removed because of malfunctions. >> and -- of course the answer is they are the fail safe mechanism and when -- when problems are identified with them, they're rectified. i believe that is what is taking place. >> you can't have it both ways. this accident occurs. you have a blowout preventer with 260 different errors, you modify it, you pull it in november of 2009. you see there's problems. this accident happens, so you write this editorial in the "wall street journal" saying, it is not our fault, it is mechanical. you said earlier, an accident is because of mechanical failure in human judgment, human error.
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seems like we have more human rear than mechanical, the mechanical is safeguarded, but this was not an ultimate fail safe. it can fail in many ways and that's what went wrong and what happened on the 20th. correct? >> well -- what is clear is the ultimate faal safe failed to operate in this case. that's absolutely clear. >> why would a company like b.p. doing this deep water drill modify the ultimate fail safe if it is supposed to protect the american people and our environment? why would you modified phi it and increase the risk of problems? the contractor warns you and you still do it. that's the problem we're having. >> as i said, the blowout preventer is the fail safe mechanism. it is designed to be that. >> questions, mr. bridges. >> thank you. mr. layward, it has been a long day. you said earlier if i recall
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correctly that -- that everyone in your organization in the culture of safety not only had the right to -- to curtail operation bus the obligation, if they saw something that was going on that was not safe, is that correct? >> that's correct. >> in response to a question, i don't remember who asked it, you made the assertion that the right people were making the decisions on the rig. di hear that correctly? >> i believe that's the case. >> who is -- who is donald devrine? >> he's the well site leader on one of the well site leaders on the -- on the deep water horizon. >> he, it was referred to in a "wall street journal" article as the company map for the b.p. man on the -- on the deep water horizon the day of the explosion, is that correct? >> that's right. >> i don't know if you're familiar with the article, this
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is several weeks ago, may 27th. they talked about a skirmish between the transocean folks and the -- the chief engineer or chief mecking on the deep water horizon and -- and -- the rig's top manager jimmy harrell. are you familiar with that discussion that apparently -- quite a heated discussion. i think mr. gonzalez was the one that property it up. >> it is my understanding, congressman that that account has been contradicted under oath in the marine board investigation that there was no debate or skirmish or anticipate other heated discussion. that is what -- i can't recall exactly who it was, but under oath at marine board investigation, i believe it was the transocean official that there was no heated discussion. >> that would be the tool pusher miles jessel?
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>> i believe that's the case. >> it was not the man that died in the accident. he was a witness to the altercation. >> well -- >> if there occurred, even if it only partially occurred, it seems like there was enough discussion that someone should say wait, let's not go forward with there because someone at least -- at least some of our number feel it is unsafe. again you said that -- the man would have the obligation not just the right to say let's halt, he would have the obligation to say well, let's get everybody on the same page. am i rong? >> you're not wrong. i think you can conclude they believed it was safe to proceed. >> will b.p. make this man available? >> if you call him, of course. >> let me ask you another question, you said in response to -- to -- to information that came ut -- up there was no
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evidence that b.p. was focusing on on the cost of drilling. yet, march 2010 strategy presentation, you anded -- you said we added resources foishantly, our cos were $1.40 barrel in 2009. that's consist went our track record having the lowest cost in the industry. that would be envyable but this a chullchur of safety, i might spend $1.47, if it meant it was a safe procedure. so was maintaining the lowest costs in the industry possibly a factor in the decision paining on this well? >> none whatsoever. >> but -- that -- >> that metric is created by the -- by deciding the volume of barrels discovered bit cost. what it talks to is the success of our exploration program and the scale of the volume that we
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we discovered, not anything to do with costs. >> it has something to do with costs. now -- it has been reported that completion of the -- of the well was running behind schedule. is this accurate? >> i bleach it was running behind schedule. >> how far? >> i don't know the precise number. >> what does it cost today to run a rig like that? >> that sort of rig fully built up costs a million a day or about that. >> so a couple of days over is a significant cost driver on that dollar 40 a barrel minimal discovery cost in the industry. >> with respect, congressman, the most important thing is we made a discovery and we wanted to secure it in the proper way. that was going to be a far bigger driver of anything, any value the company was going to create then the costs of the operation. >> i don't -- >> it is logic. >> i don't disagree with that. how i wish that had been the
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case as we're, we're -- hearing after hearing after hearing on this thing and the darn thing is bubbling. that doesn't seem to be -- to be accurate. is your own investigation looking at the issue of the -- whether or in the cost drivers were an issue in -- in the problems that were created? >> our investigation is covering everything. >> so it wasn't on your list, but nevertheless, it is -- it would be included in your -- >> my list is the -- the -- the early -- findings of the investigation in terms of the key areas to focus on. areas around cement, casing, and the integrity test. >> got it. >> and well controlled procedures. >> i got it. we're running out of time here. when you said your investigation was proceeding without privilege early on if the hearing today, so it would also cover the key issues of whether or not cost drivers were an issue in creating the problems. >> it will cover everything.
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>> thank you. thank you, mr. chairman. >> i echo what mr. scalia said earlier, we get calls and people got ideas on how to fix our problem in the gulf. i really wish you guys would open up an 800 number and take these, these things and -- and vet them and listen to what people are saying. americans are terribly, they're -- they're, we have a lot of ingenuity in america. people are watching that thing that mr. marquis made everyone's computer screen show 24 hours a day. it is making people watch that thing. people are coming with solutions. there needs to be a central location, i don't care if it is you or dr. chu but somebody needs to vet. if there is a reasonable idea, put it to work. >> questions? >> thank you. mr. hayward, is -- is the most optimistic date for the relief
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well to be completed still august? >> that is -- that -- current time. >> is august also the earliest date the leak can be stopped or would it take more time after the relief well is complete before the flow of oil is permanently halted? >> the relief well will halt permanently the flow. >> mr. hayward, in 2009, an independent firm that b.p. hired, to serve as its ombudsman headed by former federal judge stanley sporken, substantiated that b.p. was violating its own policies by not having completed engineering documents on board another b.p. rig operating in -- if the gulf of mexico. the b.p. thrts. when it gan operate -- operating in 2007. one official warned the absence of these safety documents could lead to catastrophic operator
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error. let me read to you from an internal e-mail. this goes from -- from barry duff, b.p. employee to other, other engineers at b.p. here's what he said. he said, the -- the p.i.d.'s for subsea are nom not complete and are handed over to operations. the current procedures are out of date. the risks in turning over drawings to the people out on the rig, running the "atlantis" that are not complete are, number one, the operator, the b.p. operator will assume the drawings are accurate and up to date. this could lead to catastrophic operator errors due it their assuming the drawing is correct. turning over incomplete drawings to the operator for their use is a fundamental violation of basic document control.
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having the project document control person turn over -- over drawings that are not complete places the onus on her, that they are the most current version currently there are hundreds if not thousands of subsea documents that have never been finalized yet the fass its have been turned over. and mr. hayward, b.p.'s managing attorney stated to the associated press on may 15th of this year that b.p. has reviewed the allegations and found them to be unsubstantiated. mr. hayward, were all of the engineering documents and drawings necessary to operate the "atlantis" rig safe hey fully completed before the "atlantis" rig began operating in the gulf of mexico. >> when this issue emerged, we conducted a full investigation and determined that all of the -- all of the drawings that were necessary to start up the
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operation were available to the people starting the operation at the time the operation started up. >> mr. hayward, mr. duff was relieved of his duties in the middle of august of 2008. a new person was put in charge as a result. his name is ken abbott. ken abbott has been test foying all da in washing across the street. in the natural resources committee. he's a whistle-blower. he got fired six months after he replaced mr. duff because he raised the very same concerns that there was not proper documentation, on the b.p. "atlantis." he was fired. even though, even though he raised issues that obviously have a lot of resemblance to the kind of attention to the safety protocols that were part of the
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b.p. horizon rig. is it part of your policy, mr. hayward to fire employees who -- who raise questions about the safety of your rigs? >> no, it is not. >> well, mr. -- mr. hayward, i'm afraid that is what happened. to mr. abbott. because, not only was he fired, but two weeks later they put out and was told he was part of a forced reduction but your company then put out an advertisement to hire someone to replace him on that job. earlier you said, all of the other b.p. wells in -- in the gulf of mexico that had been completed are secure and are safe to -- to operate. do you still stand by that? >> i do. >> now, do you know that judge sporken said that -- it is not true that the documents were completed when he


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